Finmeccanica Announces Financial Results of DRS Technologies for the quarter and proforma* nine-month period ended September 30, 2008
DRS Posts Record Results for 9 Months: Revenues up 24% to US$2.9billion,
proforma EBITA up 16% to US$310million, funded Backlog up 9% to US$3.9billion
Finmeccanica S.p.A. (SIFI.MI) today announced certain financial results of DRS Technologies for the quarter and proforma1 nine-month period ended September 30, 2008. For both periods, Finmeccanica said DRS generated record revenues and new orders for products and services, and funded backlog reached an all-time high. Operating profit for the first nine months of 2008 also set a new record for the period.
As previously reported, DRS Technologies, Inc. was acquired by the Company on October 22, 2008 and now operates as a wholly-owned subsidiary of Finmeccanica, which will consolidate DRS results starting from October 22, 2008.
As already communicated to the market, Finmeccanica will publish its third quarter and nine month 2008 results on November 13, 2008 and a conference call to discuss results will be held on the same day at 2.30pm (CET).
QUARTERLY RESULTS
DRS Technologies generated consolidated revenues of US$987 million for the quarter ended September 30, 2008, 26% above US$784 million for the same quarter last year. The increase was
attributable entirely to strong organic growth in each of the company's four operating segments.
Operating income for the quarter ended September 30, 2008 of US$89 million reflected a 9.0% operating margin and included approximately US$5 million in merger-related expenses, as a result of DRS’s acquisition by Finmeccanica. This compared with operating income of US$92 million for the same quarter in 2007, which included an US$12 million curtailment gain from one of the company’s benefit plans, and reflected an operating margin of 11.8%. Excluding the one-time events in both quarters, DRS posted US$94 million in proforma operating income for the 2008 three-month period on a 9.6% operating margin, compared with US$80 million in proforma operating income on a 10.3% operating margin for the 2007 three-month period.
Earnings before interest, taxes and amortization (EBITA) for the quarter ended September 30, 2008 were US$96 million, compared with $99 million for the same 2007 three-month period. Excluding the 1 Proforma nine-month results for 2008 include the nine-month period beginning January 1, 2008 and ended September 30, 2008 to show results according to calendar years. Proforma 2008 nine-month results include DRS’s fiscal 2009 first and second quarters and fiscal 2008 fourth quarter. Proforma nine-month results for 2007 include the nine-month period beginning January 1, 2007 and ended September 30, 2007 to show results according to calendar years. Proforma 2007 nine-month results include DRS’s fiscal 2008 first and second quarters and fiscal 2007 fourth quarter.
PRESS RELEASE
merger-related expenses incurred during the 2008 quarter and the benefit from the curtailment gain in the 2007 quarter, DRS reported proforma EBITA of US$101 million, 16% higher than the comparable period a year earlier.
During the three-month period, DRS captured a quarterly record of US$1.2 billion in new orders for products and services, reflecting a strong 1.2 to 1 book-to-bill ratio. These strong quarterly bookings contributed to record funded backlog at September 30, 2008 of US$3.9 billion, 9% higher than funded backlog of US$3.6 billion at September 30, 2007. During the first nine months of 2008, DRS booked US$3.3 billion in new contract awards, 19% above the same period last year and a record for the nine-month period.
9 MONTH RESULTS
For the first nine months of 2008, DRS Technologies’ revenues grew 24% organically to US$2.9 billion, compared with revenues of US$2.3 billion for the same period a year ago.
Operating income for the first nine months of 2008 was US$274 million, 26% higher than the same period last year, reflecting a 9.5% operating margin. The 2008 nine-month period included approximately US$17 million in merger-related expenses associated with Finmeccanica’s acquisition of DRS. The same period in 2007 included the positive impact of the US$12 million curtailment gain previously mentioned and the adverse impact of $40 million in pretax charges associated with the company’s Thermal Weapon Sights (TWS) II program. Excluding these one-time events in both
periods, DRS posted US$290 million in proforma operating income for the 2008 nine-month period on a 10.2% operating margin, 18% higher than US$246 million reported for same period last year.
EBITA for the nine months ended September 30, 2008 was US$293.2 million, up 23% from the same period in 2007. Excluding the US$16.6 million in merger-related expenses incurred during the 2008 period, DRS reported proforma EBITA of US$309.8 million, 16% higher than proforma EBITA of
US$266.9 million in the comparable period a year earlier, which was adjusted for the curtailment gain and TWS II charges.
DRS Technologies expects to file complete financial results on the quarter ended September 30, 2008 on form 10-Q with the U.S. Securities and Exchange Commission on or about November 7, 2008.
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